The ongoing legal brawl between Ripple Labs and the United States Securities and Exchange Commission (SEC) took a new twist, with the regulator filing its response to the blockchain payments firm. Recall that Ripple had previously accused the SEC of demanding unreasonable settlement charges, which was evident in the case of Terraform Labs.
SEC's response to Ripple Labs
Ripple posited earlier that given the material losses users faced in the Terraform ecosystem token collapse, its fine was lower when compared to what the SEC asked it to pay in a case where no users suffered any loss.
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The SEC is demanding the court to approve a $2 billion settlement in consideration of the violation of securities law committed when Ripple sold XRP to institutional investors. Ripple is arguing against the proposed fine, noting that it ought not pay more than $10 million.
In the SEC’s latest response to Ripple Labs, the regulator argued that its charges are generally agreed on on a case-by-case basis. While the average settlement rate from sales proceeds is 1.27%, the SEC said Terraform’s charges are lower because it took other important factors into consideration.
For one, the regulator said it considered that Terraform Labs is in bankruptcy and does not have enough liquidity to pay a higher fine. The SEC also pointed out that while Terraform Labs agreed to stop its actions that led to the violations, Ripple Labs has continued the same actions that prompted the lawsuit in the first place.
Remedies decision indeterminate
While the notice of supplemental authority filed by Ripple Labs is a way to add more evidence, the decision on the appropriate remedy is still expected from the court.
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In the waiting period, Ripple Labs has continued to expand its business with a stablecoin update and Archax partnership. Overall, when the decision is pronounced, it might have a major bearing on other SEC-linked cases that might require settlement.
